The Basel, Switzerland-based Financial Stability Board (FSB) said on Monday that the currencies raise concerns about consumer and investor protection and that little is known about banks’ exposure to them.

The board, which coordinates financial regulation for the Group of 20 Economies (G20), said it wants to examine how risks from cryptocurrencies could spread to other parts of the financial system.

Its efforts are to include tracking the size of the sector to understand the potential impact of heavy investor losses.

Risky business?

“Monitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall,” the board stated.

“The use of leverage, and financial institution exposures to crypto-asset markets are important metrics of transmission of crypto-asset risks to the broader financial system.”

It submitted its findings to the G20’s finance ministers and central bank heads, who are to meet in Buenos Aires, Argentina on 21-22 July.

Due to the scarcity of reliable information on banks’ holdings of crypto assets, the Basel Committee on Banking Supervision is conducting an “initial stocktake” of banks’ direct and indirect exposure to potential losses. The Committee is an affiliate of the FSB that writes bank capital standards.

That could be followed by additional data collection on the currencies, the FSB said.

The Committee is also investigating whether regulators force lenders to set aside capital against crypto holdings and is considering whether to rewrite its rules to create an explicit requirement on the matter.

Money laundering

The FSB’s moves follow a March compromise by G20 members, some of whom, such as France, wanted closer supervision, while others preferred a freer hand.

The framework includes trading volumes, pricing, clearing and margining for crypto-linked derivatives such as the bitcoin futures launched by CME Group in December.

Other regulatory issues around cryptocurrency regulation include market integrity and money laundering, the board said.

FSB chair Mark Carney, governor of the Bank of England, has said that the threat from cryptocurrencies is currently small due to the low total amounts traded in comparison to the overall financial system.

At their highest, cryptocurrencies’ global market value has amounted to less than 1 percent of annual world economic output, in contrast to credit default swaps, which helped spread instability in 2007-2009, and which at that time amounted to 100 percent of global GDP.